Looking Back at U.S. Patent Law – Big Changes in 2012 (part 2)

U.S. patent law experienced a significant number of changes in 2012, as the America Invents Act, new regulations, USPTO actions and court decisions all left an impact that will affect patent filings for years to come.

In a previous post, we discussed changes that arose due to the America Invents Act, a landmark 2011 law that made sweeping changes to U.S. patent law. This post, will address other significant changes spurred by the USPTO and the courts.

Increased Resources at USPTO

In 2012, the USPTO opened its first satellite office in Detroit, Michigan. It also announced plans to open three additional satellite facilities in Dallas, Denver and Silicon Valley. The three additional offices are expected to open in 2013, and the USPTO hired former Google Deputy General Counsel Michelle Lee to head the Silicon Valley Office.

The USPTO also increased the size of its examining corps by about 17%. This increase in manpower helped the USPTO reduce the average wait time for a first office action from 28 months in 2011 to 21.9 months in 2012 — a 21% decrease.

Court Decisions

The Federal Circuit was active as usual. Significant decisions include:

Divided Infringement: In Akamai Technologies, Inc. v. Limelight Networks, Inc. (No. 2010-1291, Fed. Cir. Aug. 31, 2012), the Court overruled a 2007 decision (BMC Resources, Inc. v. Paymentech) which held that in order for a party to be liable for induced infringement, some other single entity must be liable for direct infringement. In the new Akamai decision, the Court permitted a finding of indirect infringement where a defendant induced several other parties to collectively perform all steps required to infringe a patent’s method claim, but no single entity performed all of the steps itself.

Software is patentable (or maybe it isn’t): The Court applied inconsistent standards to patent-eligibility of software. First, inCLS Bank International v Alice Corporation Pty. Ltd. one panel of the Court’s judges stated that a claim should not be held patent-ineligible unless it is “manifestly evident” that the claim covers an abstract idea. Then, only three weeks later, in Bancorp Services L.L.C. v. Sun Life Assurance Company of Canada, a different panel of the Court found various claims to be patent-eligible in large part because they recited a computer. In the Bancorp Services case, the Court stated that “[t]o salvage an otherwise patent-ineligible process, a computer must be integral to the invention, facilitating the process in a way that a person making calculations or computations could not.”

Obviousness has its boundaries: Over the past five years, courts have found many patent claims to be invalid on grounds of obviousness. Following KSR v. Teleflex, many decisions applied the case’s legal standard of “common sense” to overturn patents for inventions that are not overly complex. However, in Mintz v. Dietz & Watson, Inc., the Federal Circuit noted that “common sense” has its boundaries. Specifically, the Court noted that in some situations the cited art must be analogous, and that an invention may not be common sense if the problem itself is not obvious.

More changes ahead in 2013

2013 is shaping up to be an equally active year for patent law. In March, the America Invents Act’s final set of regulations will take effect. These changes will shift the U.S. patent system to a first-to-file system, expand the definition of “prior art,” and begin new derivation proceedings that will allow inventorship challenges to be filed against pending patent applications.

Changes are underway in Europe as well, as the European Patent Office announced plans to make a Unified Patent System available on January 1, 2014. The new program should reduce filing costs for patents that cover many European countries. It will also make a Unitary Patent Court available to address patent disputes on a European-Union-wide basis.

Finally, USPTO Director David Kappos will end his tenure in January 2013. In addition to overseeing America Invents Act implementation, Kappos has been instrumental in implementing process improvements that reduced the USPTO’s backlog of pending patent applications. The new director will certainly have big shoes to fill.

About IP Spotlight

IP Spotlight provides news and practice tips relating to the legal and business aspects of intellectual property and other intangible assets. Topics include licensing, due diligence, acquisition, compliance and risk management associated with patents, trademarks, copyrights and trade secrets. IP Spotlight is published by Jim Singer of Fox Rothschild LLP.

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Jim Singer is a partner with the law firm of Fox Rothschild LLP, where he focuses on intellectual property acquisition, protection, enforcement and licensing. For more details and contact information, select the "About the Author" link below.

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